NEW YORK — A whirlwind of activity surrounded Kasper A.S.L. on Wednesday as the company prepares to exit Chapter 11 and complete its buyout by Jones Apparel Group.
This story first appeared in the November 20, 2003 issue of WWD. Subscribe Today.
First it emerged that Christian Francis Roth, who was expected to succeed Michael Smaldone as chief designer of Kasper’s Anne Klein division, is no longer working on the collection.
Sources also said that Kasper’s chairman and chief executive officer, John Idol, is expected to finally join Michael Kors as its ceo. Rumors he had been expected to go there were first reported in WWD on March 20, but an official announcement is expected to come today.
Although Roth’s involvement with Anne Klein was never officially confirmed, it was believed he was planning the future of the Anne Klein collection with Jones officials. Mark Mendelson, president of Jones New York Collection and Nine West Apparel, who will be responsible for Anne Klein’s sportswear businesses in bridge and better, was unavailable for comment.
Roth couldn’t be reached for comment Wednesday, and an Anne Klein official said, “Ever since Michael Smaldone left, we’ve been designing the line with the design team that’s very capable.”
One day after Anne Klein’s disappointing spring fashion show, Smaldone announced he would be joining Ann Taylor as senior vice president of design. Smaldone, who designed Anne Klein for one season, succeeded Charles Nolan, who left for a career in politics.
Roth, who rose to fame in the Eighties, won the Perry Ellis Award for new design talent in 1990. His subsequent attempts to launch a signature collection never took off. He has been consulting for several brands in recent years, including Esprit, and tried a collection for QVC in 1999.
As reported, Jones acquired the firm — including brand names Albert Nipon, Anne Klein New York, AK Anne Klein, Kasper and Le Suit — on Aug. 7 during a bankruptcy court auction. The purchase price is $232.5 million, plus the assumption of certain liabilities.
Kasper on Wednesday received a Manhattan bankruptcy court’s nod to confirm its plan of reorganization. The order, signed by U.S. Bankruptcy Court Judge Allan Gropper, paves the way for a Dec. 1 effective date of the plan and the closing of the purchase agreement by Jones for Kasper’s assets.
Kasper’s bankruptcy counsel, Alan Miller of Weil, Gotshal & Manges, told the court that under the plan, unsecured creditors will get back 100 percent, plus pre-petition and post-petition interest. Equity shareholders will get back $6.80 per share. He noted that distribution will begin shortly after the closing of the Jones purchase.
It was disclosed during the court hearing that Idol gave up $1.5 million in bonus money to ensure creditor agreement from all constituencies on the plan as well as a return to the equity shareholders. In most bankruptcies, equity holders generally get left with nothing. In the case of Kasper, Idol’s relinquishment of the right to $1.5 million equates to an equivalent amount available for additional disbursement to the creditors and equity holders.
Idol will still be well paid for his work. According to sources connected with the bankruptcy and to data from Securities and Exchange Commission filings, Idol will receive $14.5 million for his efforts in turning around Kasper’s business operations.
After the court hearing, Idol said, “This is almost the final chapter. We still have to close on the deal with Jones.”
Mark Silverschotz of Anderson, Kill & Olick, counsel to the unsecured creditors’ committee, told the court, “Management deserves a tremendous amount of credit for this turnaround.”
For its part, Jones isn’t waiting until Dec. 1 before making some moves on the Kasper assets. A motion was filed late Tuesday to reject the lease on the only U.S. Anne Klein full-price store at 417 West Broadway. According to court papers, the landlord is F&W Management Co. The lease, which expires Nov. 30, 2011, provides for a monthly base rent of $52,083. Court papers said Jones would like to vacate the premises by Jan. 31, 2004.
There are Anne Klein stores in Asia and Europe. The company recently opened a full-price store in Istanbul. According to sources, however, Jones is not expected to reopen a full-price Anne Klein store in the U.S. in the near term.
Gregg Marks, who was at the court session, is currently president of Albert Nipon and Kasper. As reported, he will be staying on as head of the Kasper suit businesses after the acquisition.